The Federal Reserve
kicks off its monetary policy meeting on Tuesday and will announce its
decision on Wednesday. The central bank is widely expected to hold
interest rates steady and stop short of signaling a possible rate
increase in September because of continued uncertainty about the
economic outlook.

In total, 15 central banks are scheduled to
meet this week. The Bank of Japan’s rate decision is due on Friday and
will be closely watched for any hints of more easing in the face of a
stronger yen post Brexit and a slowdown in the economy.

World shares
held near nine-month highs after G20 finance chiefs said over the
weekend they would use “all policy tools” to lift global growth. A
communique issued by the G20 ministers at the end of the two-day meeting
said Brexit, which dominated discussions, had added to uncertainty in
the global economy where growth was “weaker than desirable”. It added
that members, however, were “well positioned to proactively address the
potential economic and financial consequences”.

The Brexit led to
severe withdrawals at M&G, Schroders, Fidelity and Invesco in June,
as equity funds domiciled in Europe suffered their largest monthly
redemptions since September 2011. Investors pulled at least
€1-billion-euro from each of the four large investment groups, which are
either based in the U.K. or have large hubs in the country.

The latest survey
by the Association for Financial Professionals shows companies are
taking their most cautious approach to cash management since mid-2011,
and increasing their holdings of cash in response to a rise in economic
and geopolitical uncertainty. The survey shows companies accumulated
cash balances at a far quicker pace in the second quarter than in the
first, and expect to do so at a still faster pace in the current
quarter. Capital investment and hiring by US multinationals has also
been held back by swings in currency markets.

Oil prices
fell to two and a half month lows this morning on worries that a global
glut of crude and refined products would weigh on markets for some
time. Barclays bank said global oil demand in the third quarter of 2016
was expanding at less than a third of the year-earlier rate, weighed
down by anemic economic growth. Demand support from developed economies
had faded, while growth from China and India had slowed.

Meanwhile,
Libya’s hopes to boost crude exports have been dealt a blow after the
head of the National Oil Corporation objected to a deal between the
government and local guards involving payments to reopen key ports. The 2
percent drop in oil prices dragged down major energy companies. Chevron
shares were down 2.4 percent and Exxon Mobil stock gave up 1.9 percent,
the two biggest drops in the Dow Jones industrial average. Oil prices
are down nearly 12 percent this month.

Major oil companies are planning to report their second-quarter
earnings this week. BP will lead off on Tuesday, and Royal Dutch Shell
and Total, of France, will report on Thursday. Exxon, Chevron and Eni,
of Italy, will follow on Friday.

This will be a big week
for tech stocks. Apple reports earnings tomorrow; Facebook reports on
Wednesday. Alphabet and Amazon report on Thursday. Together, these four
stocks make up 30 percent of the Nasdaq 100.

We are right in the middle of earnings reporting season.
Second quarter earnings are expected to show S&P 500 companies
earnings declined again, for the fifth consecutive quarter. Bloomberg
reports second-quarter earnings fell 1 percent among the 130 companies
in the S&P 500 Index that have issued thus far; which is not as bad
as estimates at the beginning of reporting season.

And there is a bit of
positive guidance news; nearly 90 percent of companies in the S&P
500 Index that have changed previously disclosed expectations for future
earnings have raised the target. At this rate, if the guidance holds
true, we should break out of the earnings recession in the third
quarter.

Sprint
reported fiscal first-quarter revenue that beat expectations as big
discounts attracted more postpaid subscribers, and the No. 4 U.S.
wireless carrier said it expected to be cash flow positive next fiscal
year after breaking even this year. Sprint up 27% today.

Verizon is set to pay $4.8 billion in
cash to acquire Yahoo’s core internet assets as well as real estate.
After those sales, Yahoo would still hold stakes in Yahoo Japan and
Alibaba – worth about $40 billion. The companies said the deal is
subject to customary closing conditions, including approval by Yahoo’s
shareholders, and is expected to close in early 2017.

Verizon will
combine Yahoo’s search, email and messenger assets as well as
advertising technology tools with its AOL unit, which it bought last
year for $4.4 billion. Verizon, the No. 1 U.S. wireless operator, has
been looking to mobile video and advertising for new sources of revenue
outside the over-saturated wireless market. It will be a tough row to hoe
because Facebook and Google already have a dominant position in digital
ads.

AMC Entertainment
has been trying to buy Carmike Cinemas for several months. AMC’s
initial offer of $30 a share left some Carmike shareholders
feeling short-changed. So, AMC sweetened the deal, to $33.06 per share
in cash. That should seal the deal.

LVMH is selling Donna Karan to G-III Apparel. The
French luxury goods giant LVMH is selling Donna Karan International to
G-III Apparel for $650 million. The deal will be funded through new debt
and by issuing $75 million of G-III common stock to be issued to LVMH.

Outerwall,
the owner of Redbox video rental kiosks, said it had agreed to be taken
private by affiliates of private equity firm Apollo Global Management
in a deal valued at about $1.6 billion.

Tesla Motors and SolarCity have
made progress in putting together a deal that will merge the electric
car maker and the solar panel installer. The two companies are in the
final stages of carrying out due diligence on each other, and could
agree on the terms of a deal in the coming days, but it’s still unclear
if SolarCity will try to press for other bids.

Tesla announced last
month that it had made an all-stock offer for SolarCity worth $2.8
billion. It argued that by acquiring SolarCity, the two companies would
form a one-stop clean energy shop, offering consumers solar panels, home
battery storage and electric cars under a single brand.

Nintendo warns that the impact from Pokémon Go will be “limited.” Shares
of Nintendo plunged more than 17% Monday after the company released a
statement late Friday suggesting that it would see a “limited” financial
impact from Pokémon Go. The plunge has the stock down about 27% from
its recent high, but the stock is still up about 67% since the game’s
release.

Helping advance research toward
integrating drones into the National Airspace System, 7-Eleven and
upstart Flirtey have completed the first fully autonomous drone delivery
to a customer’s residence. While there’s some speculation on the ways
that companies like Amazon, Wal-Mart, Walgreens and Domino’s could use
drone delivery, many industry watchers think emergency conditions
(flood/earthquake/medical) or niche situations (oil rigs/inaccessible
roads) are the most likely scenarios for widespread drone usage.

The Japanese government and
the European Commission are working together to connect their global
positioning systems in a coordinated effort to clear a path for
autonomous vehicles. By linking Japan’s Quasi-Zenith Satellite System
and EU’s Galileo satellite network the margin of error of the combined
system will be improved dramatically. The development could be positive
for Japanese automakers and suppliers.

Two years ago,
the Federal Reserve faced a predicament: One of its New York employees
had leaked confidential government information to a banker at Goldman
Sachs. Both men ultimately pleaded guilty to stealing government
property. Goldman, for its part, paid a $50 million penalty to New York
State regulators because its “management failed to effectively
supervise” the banker.

After a considerable time, the Fed is now
preparing an enforcement action against Goldman, and the bank is
expected to pay a financial penalty to settle the case. The Fed is also
considering an action against a third man, a former Goldman executive
who worked alongside the more junior banker who received the leaked
material. Unlike Goldman, the former executive plans to fight the Fed if
it files a case against him.

Last week
we told you the Department of Justice was conducting an investigation
into IMDB, the Malaysian sovereign fund. Today, report the department of
Justice has seized four multimillion dollar Manhattan condos and a
stake in the Park Lane Hotel that are connected with the international
money laundering scheme.

Turkey ordered the detention
of 42 journalists on Monday and ordered the closure of 2,341 private
schools, charities, and other institutions, under a crackdown following a
failed coup that has targeted more than 60,000 people. Turkey also
imposed a state of emergency which extends detentions without charges to
30 days.

Russia
won’t be completely banned from the Rio Olympics. Russian athletes can
individually apply and, if they meet strict anti-doping criteria, could
be allowed to attend. The ban that applies to Russia’s track and field
Olympic team has not been lifted.

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